Anaren Reports 2nd Quarter Fiscal 2013 Results

January 22, 2013 16:15 ET | Source:Anaren, Inc.

SYRACUSE, N.Y., Jan. 22, 2013 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN) today reported net sales for the fiscal 2013 second quarter ended December 31, 2012 of $38.0 million, up 6.3% from $35.7 million for the second quarter of last year.

GAAP (U.S. generally accepted accounting principles) net income for the second quarter of fiscal 2013 was $3.5 million, or $0.27 per diluted share, up 199% from $1.2 million, or $0.08 per diluted share for the second quarter of last year.

Non-GAAP diluted earnings per share, excluding non-cash equity based compensation and intangible asset amortization, was $0.33 for the second quarter of fiscal 2013 compared to non-GAAP diluted earnings per share of $0.13 for the second quarter of fiscal 2012.

GAAP operating income for the second quarter of fiscal 2013 was $5.1 million, or 13.4% of net sales, up 261% from $1.4 million, or 3.9% of net sales for the second quarter of last year. Non-GAAP operating income for the second quarter of fiscal 2013, which excludes non-cash equity based compensation and intangible asset amortization, was $6.3 million, or 16.6% of net sales, up 134% from $2.7 million, or 7.5% of net sales for the second quarter of fiscal 2012. Both net income and operating income for the second quarter were enhanced by a one-time favorable adjustment of approximately $0.5 million to healthcare costs.

Income taxes for the second quarter of fiscal 2013 were $1.7 million, representing an effective tax rate of 32.0% compared to income tax expense of $0.3 million for the second quarter of fiscal 2012, representing an effective tax rate of 21.4%. The projected effective tax rate for fiscal 2013, absent one-time events and adjusted for the reinstatement of the Federal Research and Experimentation credit in January 2013, is expected to be approximately 28%.

Lawrence A. Sala, Anaren's Chairman, President and CEO said, "We are very pleased with the significant improvement in operating profitability resulting from a favorable product mix, operational efficiencies, and cost reductions as we exceeded our 15% Non-GAAP operating profit target. While sales levels were down 2.7% sequentially, profitability improved in both of our business segments and we continue to focus on operating efficiency given the uncertainty in both defense and wireless infrastructure spending."

Net sales for the six months ended December 31, 2012 were $77.1 million, up 3.5% from net sales of $74.5 million for the first six months of last year. GAAP net income for the first half of fiscal 2013 was $6.4 million, or $0.47 per diluted share, up 72% from $3.7 million, or $0.25 per diluted share for the first half of last year.

Non-GAAP diluted earnings per share, excluding non-cash equity based compensation and intangible amortization, was $0.59 for the first six months of fiscal 2013 compared to non-GAAP diluted earnings per share of $0.36 for the first six months of fiscal 2012.

During the second quarter of fiscal 2013, the Company generated $4.9 million in operating cash flow compared to $2.5 million in the second quarter of fiscal 2012. Additionally, during the current quarter the Company repurchased approximately 610,000 shares of its common stock for a total of $11.2 million and expended $0.9 million for capital additions. Non-operating cash receipts for the quarter included $0.1 million from the exercise of stock options and approximately $5.0 million from the sale of its manufacturing facility in Salem, New Hampshire. Cash, cash equivalents and marketable debt securities were $43.6 million at December 31, 2012, down $2.0 million from September 30, 2012. The Company had $8.0 million outstanding on its revolving credit facility at December 31, 2012, unchanged from September 30, 2012.

Wireless Group

Wireless Group net sales for the quarter were $12.8 million, up 19.0% from the second quarter of fiscal 2012, but sequentially down 2.7% compared to the first quarter, as uncertainty and softness continued in the wireless infrastructure market. Demand from wireless infrastructure customers declined throughout the second quarter and current forecasts indicate comparable demand for the third quarter.

New product investments for the quarter continued to be focused on expansion of the wireless infrastructure components and low power wireless Anaren Integrated Radio (AIR) module product lines.

Customers that generated greater than 10% of Wireless Group net sales for the quarter were Arrow Electronics, Richardson and Huawei.

Space & Defense Group

Space & Defense Group net sales for the quarter were $25.2 million, up 0.8% from the second quarter of fiscal 2012. Improved operational execution and a more favorable product mix during the current quarter resulted in higher profitability for the Group compared to the second quarter last year. Space & Defense Group sales are expected to be higher in the second half of fiscal 2013 as production rates increase on the TPQ-53 Radar Program.

New orders for the quarter totaled $25.6 million and were driven by numerous space, radar and electronic warfare applications. Space & Defense Group order backlog at December 31, 2012 was approximately $105 million.

Customers that generated greater than 10% of Space & Defense Group net sales for the quarter were Lockheed Martin, Northrop Grumman and Raytheon.

The Company believes these non-GAAP financial measures provide useful information to both management and investors to help understand and compare business trends among reporting periods on a consistent basis. Additionally, these non-GAAP financial measurements are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Outlook

For the third quarter of fiscal 2013, we anticipate comparable sales for the Wireless Group and an increase in sales for the Space & Defense Group compared to the second quarter levels. As a result, we expect net sales to be in the range of $37 to $41 million. We expect GAAP net earnings, inclusive of a tax benefit of approximately $0.09 per share related to of the impact of the reinstatement of the Federal Research and Experimentation credit retroactive to January 1, 2012, to be in the range of $0.29 - $0.37 per diluted share for the third quarter.

Non-GAAP net earnings, which are inclusive of approximately $0.05 -$0.06 per diluted share related to expected equity based compensation expense and amortization of intangibles assets, are expected to be in the range of $0.34 - $0.42 per diluted share for the third quarter.

Forward-Looking Statements

The statements contained in this news release which are not historical information are "forward-looking statements." These and other forward-looking statements are based on management's current expectations and are subject to business, market and economic risks and uncertainties that could cause actual results to differ materially from those discussed. You are encouraged to review Anaren's filings with the Securities and Exchange Commission to learn more about the various risks and uncertainties facing Anaren's business and their potential impact on Anaren's revenue, earnings and stock price. Unless required by law, Anaren disclaims any obligation to update or revise any forward-looking statement.

Conference Call

Anaren will host a live teleconference, open to the public on the Anaren Investor Info, Live Webcast Web Site (www.anaren.com) on January 23 at 8:30 a.m. (ET). A replay of the conference call will be available at 11:30 a.m. (ET) beginning January 23, 2013 through 11:30 p.m. on January 30, 2013. To listen to the replay, interested parties may dial in the U.S. at 1-855-859-2056 and International at 1-404-537-3406. The passcode is 76556541. If you are unable to access the Live Webcast, the dial in number for the U.S. is 1-877-734-4580 and International is 1-678-905-9378.

Company Background

Anaren designs, manufactures and sells complex microwave components and subsystems for the wireless communications, satellite communications and defense electronics markets. For more information on Anaren's products, visit our Web site at www.anaren.com.

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